Question 3: The data in the table below represents Total product (TP), for an agri-business involved in potato production. Capital (fixed factor)Labor (variable factor)Output(units) orTotal physical product (TPPL)Average physical product (APPL)Marginal physical product (MPPL) 1000 1017 10220 10339 10455 10566 10670 10770 10867 Calculate the marginal product and average product value. At what point do diminishing marginal returns set in? And using the values of AP and MP obtained from part (i), plot the graphs of TP, AP and MP being careful to fully label the graph and explain briefly the law of diminishing marginal returns from your computation. How does the hypothesis of diminishing returns (MP& AP) influence the behaviour of costs (MC& AC)?

Here the capital is fixed and Labour is increasing which means the production function is in the…

Answered: Question 3: The data in the table…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter8: Costs And The Supply Of Goods

Section: Chapter Questions

Problem 19CQ

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Question 3:

The data in the table below represents Total product (TP), for an agri-business involved in potato production.

Capital (fixed factor)	Labor (variable factor)	Output(units) or Total physical product (TPP_L)	Average physical product (APP_L)	Marginal physical product (MPP_L)

10	0	0
10	1	7
10	2	20
10	3	39
10	4	55
10	5	66
10	6	70
10	7	70
10	8	67

Calculate the marginal product and average product value.

At what point do diminishing marginal returns set in? And using the values of AP and MP obtained from part (i), plot the graphs of TP, AP and MP being careful to fully label the graph and explain briefly the law of diminishing marginal returns from your computation.

How does the hypothesis of diminishing returns (MP& AP) influence the behaviour of costs (MC& AC)?

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